BEIJING: Global oil prices eased in early Asian trading on Monday on concerns that the United States is poised to impose additional tariffs on China, outweighing supply fears from upcoming sanctions on Iran. Brent crude oil futures LCOc1 dipped 16 cents, or 0.2 percent to $77.93 a barrel by 0035 GMT. U.S. West Texas Intermediate […]

BEIJING: Global oil prices eased in early Asian trading on Monday on concerns that the United States is poised to impose additional tariffs on China, outweighing supply fears from upcoming sanctions on Iran.

“The market’s expectation of shortages has cooled after data from last week showed increases in supplies, while investors have lowered the outlook for oil demand,” said Wang Xiao, head of crude research with Guotai Junan Futures.

U.S. President Donald Trump is likely to announce new tariffs on about $200 billion on Chinese imports as early as Monday, a senior administration official told Reuters on Saturday.

The escalating trade row is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from upcoming U.S. sanctions on Iran over its nuclear programme.

Refiners in India, Iran’s second largest crude buyer will cut their monthly crude loadings from Iran for September and October by nearly half from earlier this year.

Also weighing on oil prices, U.S. drillers added two oil rigs in the week to Dec. 1, bringing the total count up to 749, the highest since September, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.

ANKARA: Turkey’s central bank surprised markets on Thursday with a bigger than expected rate hike to battle soaring inflation and boost the lira, prompting the embattled currency to surge in value. Turkey has in recent weeks been battling through one of the most troubled periods for its economy under the rule of President Recep Tayyip […]

ANKARA: Turkey’s central bank surprised markets on Thursday with a bigger than expected rate hike to battle soaring inflation and boost the lira, prompting the embattled currency to surge in value.

Turkey has in recent weeks been battling through one of the most troubled periods for its economy under the rule of President Recep Tayyip Erdogan, with the lira battered on currency markets in August.

The central bank hiked the one week repo auction rate 625 basis points from 17.75 percent to 24 percent, significantly higher than the Bloomberg consensus of an increase to 21 percent.

The lira reacted strongly to the decision, rising by five percent in value to 6.0 lira to the US dollar. It later shed some of those gains but was still up nearly three percent in value at 6.16 to the dollar after 1330 GMT.

The magnitude of the hike was all the more surprising given that just before the decision Erdogan had slammed interest rates as a “tool of exploitation”.

“It was a big surprise to us, but probably to every Turkey-watcher,” said Nora Neuteboom, an economist at ABN Amro, saying the move was a “positive signal” with the bank wanting to show its independence and commitment to fight inflation.

“However, one swallow doesn’t make a summer,” she warned.

In another bid to prop up the lira, Erdogan earlier on Thursday ordered by decree that property agreements in foreign currencies would not be allowed.

‘Strong monetary tightening’

The bank had not touched interest rates since early June with markets becoming increasingly concerned that the policy of the nominally independent bank is being dictated by Erdogan.

There had been indications from the bank that it would raise rates after inflation came in at nearly 18 percent in August.

The bank described the hike as a “strong monetary tightening to support price stability”.

It vowed the tight stance in monetary policy would be “maintained decisively until inflation outlook displays a significant improvement”.

The bank must balance concerns over slipping growth, which, although a robust 5.2 percent in the second quarter on an annual comparison, showed signs of weakness with some analysts predicting Turkey is heading for recession.

The bank´s intervention was the latest aggressive rate hike to calm economic turbulence in an emerging market after the Argentinian central bank´s recent hike from 45 to 60 percent on August 30.

But Neuteboom of ABN Amro said much more was needed for Turkey to turn around “the negative spiral” the economy is in.

“Turkey needs structural reforms to increase productivity, to decrease its dependence on short-term portfolio flows and to decrease the rigidness in the labour market.”

‘Tool of exploitation’

Economists have argued the nominally independent bank has come under pressure from Erdogan who, only a couple of hours before its decision, launched a blistering attack on the bank and interest rates.

He earlier charged the bank with failing to control inflation and again aired his unorthodox view that low rates bring inflation down.

“Interest rates are the cause, inflation is the result. If you say ´inflation is the cause, the rate is the result´, you do not know this business, friend,” he added.

Anthony Skinner, director of Middle East and North Africa at Verisk Maplecroft, told AFP he believed the hike had already been agreed. “Erdogan´s speech… was intended to put distance between himself and the (bank´s) decision.”

The bank implemented what economists described as a hidden interest rate hike in mid-August, forcing banks to borrow at the higher 19.25 percent through the overnight lending facility.

The bank later said funding would be provided via the policy rate, the one week repo auction rate, instead of through overnight lending from September 14.

Analysts say the lira´s plunge last month had been sparked by a combination of concerns over domestic policymaking and a crisis in relations with the United States.

As well as being seen to undermine the independence of the central bank, Erdogan in July stunned markets by appointing his son-in-law Berat Albayrak as finance minister.

Relations with the US deteriorated last month after Washington imposed sanctions on two Turkish ministers over the detention of an American pastor and President Donald Trump doubled steel and aluminium tariffs on Turkey.

VLADIVOSTOK: Russian President Vladimir Putin on Tuesday said that Moscow and Beijing have plan to use their own national currencies more often in trade deals than dollar, as Russia’s relations with the West deteriorates. “The Russian and Chinese sides confirmed their interest in using national currencies more actively in reciprocal payments,” Putin told journalists during […]

VLADIVOSTOK: Russian President Vladimir Putin on Tuesday said that Moscow and Beijing have plan to use their own national currencies more often in trade deals than dollar, as Russia’s relations with the West deteriorates.

“The Russian and Chinese sides confirmed their interest in using national currencies more actively in reciprocal payments,” Putin told journalists during a press briefing alongside with Chinese Leader Xi Jinping after talks at an economic forum in the far eastern Russian city of Vladivostok.

Putin said this would “increase the stability of banks’ servicing of export and import operations while there are ongoing risks on global markets.”

Russia has faced ever harsher sanctions since angering the West and Kiev by annexing Crimea in year 2014 and backing separatist rebels in parts of eastern Ukraine.

In recent months the United States has imposed more sanctions over alleged Russian interference in the presidential elections and the poisoning of ex-double agent Sergei Skripal and his daughter in Britain.

Since the latest round of US sanctions and under the threat of further measures, the Russian currency, ruble has dropped sharply in value against the dollar and euro.

Chinese currency yuan has also fallen steadily against the US dollar in recent months.

KARACHI: State Bank of Pakistan (SBP) has dismissed rumours circulating on social media regarding discontinuation of the Rs.5000 banknote and requested the general public to pay no heed to such disinformation. It is further clarified that SBP Act 1956 clearly defines the roles and responsibilities of different institutions including SBP for issuance, circulation and demonetisation […]

KARACHI: State Bank of Pakistan (SBP) has dismissed rumours circulating on social media regarding discontinuation of the Rs.5000 banknote and requested the general public to pay no heed to such disinformation.

It is further clarified that SBP Act 1956 clearly defines the roles and responsibilities of different institutions including SBP for issuance, circulation and demonetisation or cancellation of banknotes.

More specifically, section 25 of the Act requires a recommendation of SBP Board of Directors before the federal government makes any decision about the demonetisation or cancellation of banknotes.

The central bank stated that the SBP Board has not submitted any recommendation for demonetization or discontinuation of Rs.5000 or any other banknote to federal government or cabinet.

Furthermore, in case of demonetization of any bank note, SBP announces in advance and provides ample time to public to change the currency under demonetization process.

It further stated that all such announcements are placed on its website and circulates the same through its social media platforms as well.

It further advised the public not to pay heed to any such rumours which are aimed at creating unnecessary hype and anxiety. The public is also requested to verify the announcement from the central bank’s website or social media sites before forwarding to their contacts.

Last month, Finance Minister Asad Umar had also denied the reports regarding discontinuation of Rs. 5,000 currency notes. He termed the rumours circulating on social media as baseless and said that no such proposal was under consideration.

Unverified reports were going rounds on social media claiming that the government was about to discontinue the notes within days prompting panic among the public prompting the government to issue a clarification.

BEIJING: Chinese airlines are likely to buy 7,690 planes worth $1.2 trillion over the next 20 years, Boeing Co said on Tuesday. Boeing’s latest estimate for the period to 2037 is 6.2 percent higher than the U.S. planemaker’s previous prediction of 7,240 planes last year. China will also need over $1.5 trillion worth of commercial […]

BEIJING: Chinese airlines are likely to buy 7,690 planes worth $1.2 trillion over the next 20 years, Boeing Co said on Tuesday.

Boeing’s latest estimate for the period to 2037 is 6.2 percent higher than the U.S. planemaker’s previous prediction of 7,240 planes last year.

China will also need over $1.5 trillion worth of commercial services for its aircraft fleet, Boeing said.

There are more than 10,000 Boeing commercial jetliners in service, flying passengers and freight more efficiently than competing models in the market. More than 5,700 Boeing airplanes are currently on order.

KARACHI: The State Bank of Pakistan on Monday released the figures of remittances sent by overseas Pakistanis amounting to US $3.9 billion, showing a growth of 13.45% compared with $ 3.4 billion received during the same period in the preceding year. According to SBP, overseas Pakistanis remitted US $3.9 billion in the first two months […]

KARACHI: The State Bank of Pakistan on Monday released the figures of remittances sent by overseas Pakistanis amounting to US $3.9 billion, showing a growth of 13.45% compared with $ 3.4 billion received during the same period in the preceding year.

According to SBP, overseas Pakistanis remitted US $3.9 billion in the first two months of fiscal year- 2018-19.

During August 2018, the inflow of worker’s remittances amounted to US$ 2037.33 million, which is 5.60% higher than July 2018 and 4.24% higher than August 2017.

The country wise details for the month of August 2018 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to US$ 465.53 million, US$ 461.2 million, US$ 316.89 million, US$ 278.84 million, US$ 193.17 million and US$ 59.64 million, respectively, compared with the inflow of US$ 511.28 million, US$ 440.38 million, US$ 260.34 million, US$ 249.14 million, US$ 230.22 million and US$ 62.75( million respectively in August 2017. Remittances received from Malaysia Norway, Switzerland, Australia, Canada, Japan and other countries during August 2018 amounted to US$ 262.06 million together as against US$ 200.35 million received in August 2017.

The rise in remittances is being seen in context of Imran Khan’s appeal to overseas Pakistanis to donate for dams.

On Sep 7, Prime Minister Imran Khan had urged the overseas Pakistanis to donate generously for construction of dams in Pakistan to avert the looming water crisis.

The PM urged the Pakistanis working abroad to donate at least 1000 dollars to the dam fund so that the water reservoirs could be constructed within time and within the estimated cost.

“Our debt today stands at 30,000 billion. But one of our biggest issues today is the looming water crisis. When Pakistan was created; every Pakistani had 5600 cubic-metres of water. Today that stands at only 1000 cubic-metres,” said the PM.

He was of the view that delaying such projects increases the cost so his government wants to build water reservoirs on time.

ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government has decided to amend the accountability law in an attempt to keep a suitable check on corruption cases in order to avoid unnecessary harassment. The development comes in the backdrop of several multinational companies wrapping up operations in Pakistan and filing cases in international courts against corruption investigation initiated by the […]

ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government has decided to amend the accountability law in an attempt to keep a suitable check on corruption cases in order to avoid unnecessary harassment.

The development comes in the backdrop of several multinational companies wrapping up operations in Pakistan and filing cases in international courts against corruption investigation initiated by the anti-corruption watchdog.

Several of these companies have won cases and have claimed billions of dollars in damages from Pakistan government.

Under the reforms, the National Accountability Bureau (NAB) would have to prove guilty an accused before arrest which will stop harassment of businessmen, politicians and bureaucrats.

During tenures of past governments, NAB had been used as a political tool to harass businessmen, politicians and multinational companies.

The new PTI government has constituted a task force with a mandate to reform the NAB law in order to turn the bureau into an institution that is more focused and effective in dealing with mega corruption scandals with suitable checks and balances.

Under the reforms, the government will also place certain checks and controls on NAB officials to prevent them from misusing their powers against businessmen, politicians, companies and bureaucrats.

The task force will work on improving the system to ensure fair practices, clear jurisdictions and scope as well as improvement in conviction rate.

NAB would be bound to focus on the recovery of public money and mega corruption cases.

According to the terms of reference of the task force, transparency and certainty in NAB’s decision-making, structuring or elimination of discretion and arrest only after being proven guilty will be ensured.

NAB will be bound not to take any unlawful action and all its actions should be against those involved in corruption and having assets beyond means.

The task force will also work on the conflict of multiple jurisdictions, money threshold of NAB cases which is applicable in mega corruption cases and capacity building of NAB to investigate white-collar crimes.

The task force comprises federal minister for law and justice as chairman, federal secretary law, parliamentary secretary for law, attorney general, chairman or deputy chairman of NAB and prosecutor general of NAB.

The chairman of the task force can invite any other person to become a member of the task force.

Shahzad Akbar, Special Assistant to the Prime Minister on Accountability, has also been made member of the task force.

ISLAMABAD: Finance Minister Asad Umar gave a commitment to influential industrialists on Friday that the government would stick to the pre-election announcement of providing gas and electricity to five export-oriented sectors at regionally competitive rates. The minister agreed that the government would not increase electricity and gas prices for the industries, said Gohar Ijaz, Patron-in-chief of […]

ISLAMABAD: Finance Minister Asad Umar gave a commitment to influential industrialists on Friday that the government would stick to the pre-election announcement of providing gas and electricity to five export-oriented sectors at regionally competitive rates.

The minister agreed that the government would not increase electricity and gas prices for the industries, said Gohar Ijaz, Patron-in-chief of the All Pakistan Textile Mills Association (Aptma) – the body working to protect the interests of millers, while talking to The Express Tribune.

Ijaz said Umar assured a delegation that the government would honour its commitment given in the Pakistan Tehreek-e-Insaf’s (PTI) textile policy.

The policy promises to provide gas to the industries at 6.5 US cents per mmbtu and electricity at 7.5 US cents per unit.

Ijaz claimed that the minister assured them that in order to keep prices at the promised level, the government would find a way by either giving a subsidy from the budget or cross-subsidising the industries.

Although the finance minister has made the commitment, the government has not yet given its policy on new electricity and gas prices. The National Electric Power Regulatory Authority (Nepra) has indicated in a meeting of the Economic Coordination Committee (ECC) that electricity prices may be increased by over 33% to Rs15 per unit.

To keep prices at the current level for the export-oriented sector, the government will have to either take a major hit on the budget or it will have to shift the burden on to other consumers.

Electricity and gas prices are significantly higher than regional or international prices in the industrial sector. Electricity is cheaper by about Rs3 in India and by Rs5 in Bangladesh.

The Oil and Gas Regulatory Authority (Ogra) has suggested up to 186% increase in gas prices. Gas utility companies have been complaining about a significantly higher purchase price than their average sale price, leading to a massive shortfall in their revenues.

The minister asked the Aptma delegation to sort out other sector-related issues in a meeting with Adviser to the Prime Minister on Textile and Industry Abdul Razak Dawood.

An official handout of the finance ministry stated that Umar told the Aptma delegation that it was his foremost priority to support in any way possible the export-oriented sectors and in that regard all possible cooperation would be made by the government.

It added the Aptma delegation discussed various issues regarding gas and electricity pricing, proposed withdrawal of customs duty and sales tax on import of raw material, sales tax refund, extension of duty drawback scheme for five years and maintaining a market-based exchange rate.

The finance minister assured the delegation of his government’s full support to uplift the export-oriented sector on the condition that the sector met its obligations for increasing exports, bringing much-needed foreign exchange and would not in any case be helpful to anyone involved in tax evasion.

The minister said the news relating to increase in gas and electricity tariffs had been misreported in the media as so far no such decision had been taken by the government, stated the finance ministry.

The minister stated that the Ministry of Finance would fully support the recommendations of the adviser on textile and commerce in all industry-related matters.

Meeting with fertiliser manufacturers

Separately, Umar held a meeting with fertiliser manufacturers on the thorny issue of fertiliser pricing, subsidies and the windfall gain the manufacturers made last year.

The minister refused to accept the viewpoint of the manufacturers, asking them to shut their units if they were unprofitable at current prices.

The minister said the availability of sufficient quantities of fertiliser to the farmers at affordable rates was a priority of the government and all necessary measures would be taken in that regard, stated the finance ministry.

ISLAMABAD: Amid uneven progress under the China-Pakistan Economic Corridor (CPEC), the PTI government has decided to give a push to neglected areas and declared development of Gwadar as its top priority, rekindling hopes of developing the country’s hinterlands. “The authorities concerned will urge the visiting high-level Chinese delegation to actively pursue Gwadar `projects,” said sources in […]

ISLAMABAD: Amid uneven progress under the China-Pakistan Economic Corridor (CPEC), the PTI government has decided to give a push to neglected areas and declared development of Gwadar as its top priority, rekindling hopes of developing the country’s hinterlands.

“The authorities concerned will urge the visiting high-level Chinese delegation to actively pursue Gwadar `projects,” said sources in the Ministry of Planning and Development.

The Chinese foreign minister and Vice Chairman of the National Development Reforms Commission (NDRC) on Friday began his three-day visit to Pakistan.

“During meetings with the Chinese delegation, the planning minister will urge China to fast track work on the New Gwadar International Airport, Gwadar Free Zone and Port and Gwadar Eastbay Expressway project,” according to the Ministry of Planning officials.

Work on CPEC remained slow during the past eight months because of political transition in the country. Now both the Pakistani and Chinese sides have decided to hold meetings of respective working groups that will be followed by a meeting of bilateral Joint Cooperation Committee (JCC), tentatively scheduled for November in China.

The meeting of the Joint Working Group on transport will also take place in the middle of October in China.

During the last five years, the major focus had remained on construction of two eastern route roads and establishing coal-based power generation plants under CPEC.

The last government neglected the western route of CPEC that can connect hinterlands of Balochistan and Khyber-Pakhtunkhwa. It also could not ensure progress on water and electricity supply projects in Gwadar, without which no industrialisation can take place in the port city.

While taking his first briefing on CPEC on Thursday, Prime Minister Imran Khan stated that the development of western route of CPEC would have developed Pakistan’s under-developed areas.
Contrary to a snail’s pace progress on the western route, the eastern route has been completed by over 60%.

“The PTI government has decided to actively pursue projects in Gwadar and industrialisation under CPEC, Main Line railway and Karachi Circular Railway projects,” said sources in the planning ministry.

“The robust development of Gwadar under CPEC is a top priority of the new government with a special focus on rapid industrialisation in the strategically located port city,” said Minister for Planning, Development & Reform Makhdoom Khusro Bakhtiar on Friday.

Bakhtiar presided over a steering committee meeting on the Gwadar Smart Port City Master Plan. The Gwadar Smart Port City Master Plan remains incomplete and work is now expected to be finished by the end of next month.

The minister said, “Pakistan cannot afford to wait any longer as our economy does not have the luxury of time. Industrialisation in this port city is a low hanging fruit, considering its prospect of international connectivity and suitable cost of transportation,” he added.

“We need to structure the Gwadar Industrial Zone with a kind of incentives that yield high rate of return,” he said while emphasising on the industrialisation model that should have an inclusive nature vis-a-vis the private sector.

However, work on the Gwadar Free Zone was also falling behind the schedule, as the authorities concerned have yet to transfer land to the Chinese authorities, which is currently under the control of the Navy and the Coast Guard.

Bakhtiar said Gwadar could be transformed into a transshipment hub to explore opportunities of the blue economy. “We need to have in place all prerequisites for that purpose which should include provision of water, energy, road and railway connectivity,” he added.
There has been criticism in the past on financing modalities of CPEC.

A few days ago, economist Dr Atif Mian had said there was a blanket ban on any objective assessment of CPEC. He said the media also feed the frenzy that CPEC was a “game changer”, which led to development of a big bubble in the port city (currently largely sand) of Gwadar.

Dr Mian said that Pakistani government funded large infrastructure projects through China’s Belt and Road Initiative, which became one of the reasons for external debt rise. The borrowing raised domestic demand “artificially”, making Pakistan more expensive and less competitive globally, according to one of his tweets.

He criticised the idea of borrowing from outside for building infrastructure or institutions. Dr Mian argued that because of this approach Pakistan suffered an extreme version of Dutch Disease.

Through his tweets, he said most of borrowing and spending deals were highly opaque.” No one really knows what’s going on.”

He argued that deals have to be structured properly, with proper macro-prudential framework. “Unfortunately, none of that was done.

Karachi (Staff Report): The Pakistan Stocks Exchange on last day of the week dropped over 400 points. In the morning, trading opened on a positive note and the index rose past 41,400 points. Later, it fell around 360 points by the end of first half and extended the decline in second half. At close, the […]